Mihal and Beblavy Propose Different Calculation of Minimum Wage

Miroslav Beblavy (L), Jozef Mihal (R)

Bratislava, August 28 (TASR) – Independent MPs Jozef Mihal and Miroslav Beblavy are proposing changes to the way in which the minimum wage is computed with the aim of significantly increasing the take-home earnings of low-income groups, TASR learnt on Monday.

In the current set-up of social and health-care levies, the state deducts 58 cents from each euro by which the minimum wage is increased, according to Mihal and Beblavy, who claim that their changes would shift the bulk of the burden of minimum wage increases from employees and employers onto the state.

The proposal pivots around three pillars. First, the minimum wage should be set at half the average salary in a statutory manner. Secondly, the non-taxable portion of income should be equivalent to the minimum wage minus social contributions. Third, a tax deduction vis-a-vis health-care levies should equal the minimum wage.

“Prime Minister Robert Fico has announced an increase in the minimum wage by €45 [per month]. But he omitted the fact that the minimum wage will only increase by €29 net, while the expenditures of employers will increase by as much as €70 [per employee],” stated the two MPs.

Under Mihal and Beblavy’s proposal, the gross minimum wage would be increased to €456 as of 2018, while the net portion of it would be €413 (€39 higher than in 2017), and the total expenditures for employers would be €571 (an increase of €10).

In contrast, according to Mihal and Beblavy, the Government’s proposal is to increase the gross minimum wage to €480. The net part of the payment is equivalent to €403, and the employer’s expenditures represent as much as €631.

They also propose instituting automatic annual increases in the minimum wage based on the economy’s health. “The Smer-SD party is scoring political points from minimum wage increases on an annual basis. We want the process to become transparent and set in line with how well the economy is doing, rather than being dependent on how many years there are to go before a general election,” said Beblavy.